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Pre-Feasibility Study

(Bakery & Confectionary)

Small and Medium Enterprises Development Authority Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road, Lahore Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7

helpdesk@smeda.org.pk
REGIONAL OFFICE Punjab 3rd Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road Lahore, Tel: (042) 111-111-456 Fax: (042) 36304926-7 helpdesk.punjab@smeda.org.pk REGIONAL OFFICE Sindh 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 35610572 helpdesk-khi@smeda.org.pk REGIONAL OFFICE Khyber Pakhtunkhwa Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 111-111-456 Fax: (091) 5286908 helpdesk-pew@smeda.org.pk REGIONAL OFFICE Balochistan Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 2831623, 2831702 Fax: (081) 2831922 helpdesk-qta@smeda.org.pk

Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost December, 2013

Table of Contents 1 2 3 4 5 6 7 8 9 DISCLAIMER............................................................................................................. 2 PURPOSE OF THE DOCUMENT ............................................................................. 3 INTRODUCTION TO SMEDA ................................................................................. 3 INTRODUCTION TO SCHEME ............................................................................... 4 EXECUTIVE SUMMARY ......................................................................................... 4 BRIEF DESCRIPTION OF PROJECT & PRODUCT ............................................... 4 CRITICAL FACTORS................................................................................................ 5 INSTALLED & OPERATIONAL CAPACITIES ...................................................... 5 POTENTIAL TARGET MARKET ............................................................................ 5 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 Project Economics ............................................................................................ 6 Project Financing .............................................................................................. 6 Project Cost....................................................................................................... 7 Space Requirement ........................................................................................... 7 Machinery and Equipment Requirements ........................................................ 8 Furniture & Fixtures and Other Equipments .................................................... 9 Raw Material Requirements ............................................................................. 9 Human Resource Requirement ....................................................................... 10 Revenue Generation ....................................................................................... 10 Utilities and Other Costs................................................................................. 10

10 PROJECT COST SUMMARY ................................................................................... 5

11 CONTACT DETAILS OF EXPERTS & CONSULTANTS .................................... 11 12 ANNEXURES ........................................................................................................... 12 12.1 12.2 12.3 12.4 12.5 13.1 13.2 Income Statement ........................................................................................... 12 Statement of Cash Flow.................................................................................. 13 Balance Sheet ................................................................................................. 14 Useful Project Management Tips ................................................................... 15 Useful Links ................................................................................................... 16 Raw Material Assumptions ............................................................................ 17 Sales Assumptions .......................................................................................... 23

13 KEY ASSUMPTION ................................................................................................ 17

1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a general idea and information on the said subject. Although, the material included in this document is based on data/information gathered from various reliable sources; however, it is based upon certain assumptions which may differ from case to case. The information has been provided on as is where is basis without any warranties or assertions as to the correctness or soundness thereof. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA, its employees or agents do not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The contained information does not preclude any further professional advice. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information which is necessary for making an informed decision; including taking professional advice from a qualified consultant/technical expert before taking any decision to act upon the information. For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk

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Pre-feasibility Study

Bakery and Confectionery

2 PURPOSE OF THE DOCUMENT


The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs in project identification for investment. The project pre-feasibility may form the basis of an important investment decision and in order to serve this objective, the document/study covers various aspects of project concept development, start-up, production, marketing, finance and business management. The purpose of this document is to facilitate potential investors in Bakery and ConfectioneryBusiness by providing them a general understanding of the business with the intention of supporting potential investors in crucial investment decisions. The need to come up with pre-feasibility reports for undocumented or minimally documented sectors attains greater imminence as the research that precedes such reports reveal certain thumb rules; best practices developed by existing enterprises by trial and error, and certain industrial norms that become a guiding source regarding various aspects of business set-up and its successful management. Apart from carefully studying the whole document one must consider critical aspects provided later on, which form basis of any Investment Decision.

3 INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was established in October 1998 with an objective to provide fresh impetus to the economy through development of Small and Medium Enterprises (SMEs). With a mission "to assist in employment generation and value addition to the national income, through development of the SME sector, by helping increase the number, scale and competitiveness of SMEs" , SMEDA has carried out sectoral research to identify policy, access to finance, business development services, strategic initiatives and institutional collaboration and networking initiatives. Preparation and dissemination of prefeasibility studies in key areas of investment has been a successful hallmark of SME facilitation by SMEDA. Concurrent to the prefeasibility studies, a broad spectrum of business development services is also offered to the SMEs by SMEDA. These services include identification of experts and consultants and delivery of need based capacity building programs of different types in addition to business guidance through help desk services.

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Pre-feasibility Study

Bakery and Confectionery

4 INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan, for young entrepreneurs, with an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide subsidised financing at 8% mark-up per annum for one hundred thousand (100,000) beneficiaries, through designated financial institutions, initially throughthe National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL). Small business loan upto 2 millionwith tenure upto8 years, inclusive of 1 year grace-period and a debt: equity of 90 : 10 will be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah, Balochistan, Gilgit Baltistan, Azad Jammu &Kashmir and Federally Administered Tribal Areas (FATA).

5 EXECUTIVE SUMMARY
Bakery & Confectionery business is growing in both urban and semi-urban areas. This pre-feasibility study encompasses the bakery business located in commercial neighborhood surrounding and middle income residential localities. Major productsinclude cakes, snacks, sweets, nimko, biscuits, bread and general confectionery items, which will be sold to target customers of the vicinity.The sales outlet will be supported by an in house production facility. Selections of adequate product mix and business location, supported by marketing efforts are the critical success factors. This Bakery & Confectionery business will be started as sole proprietorship with an investment of Rs. 2.04 million.This project is based on 90% debt and 10% equity ratio. Projected NPV, IRR and Payback of this project are Rs. 8.38 million51%and 2.76years respectively. The business will provide employment opportunity to 06 individuals including the owner manager.

6 BRIEF DESCRIPTION OF PROJECT & PRODUCT


The proposed Bakery & Confectioneryshop is a small scale projectwith a production area and sales out-let. It will be equipped with basic machinery and fixtures. The production area will require covered area of 2,700 sqft and the outlet will be established on 900 sqft. The sales outlet will remain open for business for 16 hours per day around the year. Product mix will include cakes, snacks, sweets, nimko, biscuits, bread and general confectionery items. This merchandise will be prepared and acquired according to thedemand of local customers and in quantities directly proportional to expected sales.
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Pre-feasibility Study

Bakery and Confectionery

Out of total sales revenue 70% will come from bakery items and balance 30% from general confectionery items.Maximum sales are expected during Eid seasons and in winters.First year revenues of the project are estimated to be Rs 11.24 million. It is expected that production growth rate will be 5% per annum along with 10% per annum increase in sales price.

7 CRITICAL FACTORS
Background knowledge and experience of the entrepreneur in the bakery business. Induction of trained human resource for production of requisite items. Maintenance of quality and hygiene standards. Pricing strategy & understanding requirements of the target customers. Decor presentation and layout of the shop and products. Locationconsiderations for easy access of the customers.

8 INSTALLED & OPERATIONAL CAPACITIES


As mentioned the sales of bakery items is 70 % of total sales revenue. The installed capacity of bakery depends on the variety of the products being produced. Installed capacity of major production items is cakes 23,758 pounds, 40,470 pieces of snacks, 11,812 pounds of sweets and nimko, and 11,800 pounds of mixed biscuits. Starting capacity utilization is 70% of the installed capacity growing at the rate of 5% per annum.

9 POTENTIAL TARGET MARKET


Areas having presence of middle income groups in the smaller cities will be an ideal location for opening sales outlet of the business. Ideally, production facility of the workshop should be located alongside the sales outlet; however, if the rental costs are a constraint, production facility can be established at a distant economical location. In such a case, higher transportation costs may need to be factored in. Smaller cities with growing middle income group such as Sargodha, shekhupura, Gujrat, Sukkur, Hyderabad, Nowshehra, Charsadda, Khuzdar and Gilgit are some of the prospective cities for setting up this business.

10 PROJECT COST SUMMARY


A detailed financial model has been developed to analyze the commercial viability of Bakery and Confectionery under the Prime Ministers Youth Business
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Pre-feasibility Study

Bakery and Confectionery

Loan. Various cost and revenue related assumptions along with results of the analysis are outlined in this section. The projected Income Statement, Cash Flow Statement and Balance Sheet are attached as annexures. 10.1 Project Economics All the figures in this financial model have been calculated for estimated sales of Rs. 11.24 million in the year one. The capacity utilization during year one is worked out at 70% with 5% increase in subsequent years up to the maximum capacity utilization of 95%. The following table shows internal rates of return and payback period. Table 1: Project Economics
Description Internal Rate of Return (IRR) Payback Period (yrs) Net Present Value (Rs.) Details 51% 2.76 8,378,950

Project returns are based on the margins of the items sold. Profitability of the business is highly dependent on raw material cost. Moreover, in bakery or food item businesses the probability of wastage is higher, hence the reduction of wastage through demand and supply analysis will play a vital role in profit maximization. In this regard, efficient supply chain management will be an appropriate strategy for this venture. Another crucial factor for the success of this project is to maintain the hygienic standards and clean environment to avoid customer complaints. 10.2 Project Financing Following table provides details of the equity required and variables related to bank loan;

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Pre-feasibility Study

Bakery and Confectionery

Table 2: Project Finance Description Total Equity (10%) Bank Loan (90%) Markup to the Borrower (%age/annum) Tenure of the Loan (Years) Grace Period (Year) Details Rs. 204,144 Rs. 1,837,298 8% 8 1

10.3 Project Cost Following fixed and working capital requirements have been identified for operations of the proposed business. Table 3: Capital Investment for the Project Description Capital Cost Plant and Machinery Furniture, Fixture and Office Equipment Motor Vehicles Pre-operating Cost Total Capital Cost Working Capital Raw Material Inventory Up-front Building Rent Cash Total Working Capital Total Project Cost 106,692 225,000 150,000 481,692 2,041,442 1,124,750 270,000 45,000 120,000 1,559,750 Amount Rs.

*Pre-paid Building and Shop Rent (for 1 Kanal @ Rs. 75,000 per month) 3 Months Rent as Security and 1 Months Advance Rent calculated.

10.4

Space Requirement

The space requirement for the proposed bakery and confectionary unit mainly includes the production hall, store room and a retail outlet. For this purpose it is
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Pre-feasibility Study

Bakery and Confectionery

recommended that a rented place of maximum 3,600 sqft (i.e. 2,700 sqft for production space and 900 sqft for outlet) would be acquired on rent basis in the vicinity of newly developing housing societies in the major cities. The production space and bakery outlet could be acquired at separate places. However, it should be ensured that both the facilities are located closely for easy supply of produced goods to the outlet. Table 4: Space Requirement Description Production Space Outlet Space 10.5 Estimated Area (Sqft) 2,700 900 Monthly Rent (Rs.) 30,000 45,000

Machinery and Equipment Requirements

Plant, machinery and equipment for the proposed project are stated below. Table 5: List of Plant Machinery and Equipment
Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 Description of Item Flour Sifter Mixer (60 Kg or 40 Ltr Capacity Cross Sheeter Oven (8x8 ft) Dyes Deep Freezer Fryer and Burner Ceiling Machine Moving Trolleys Trays UPS and Batteries Misc. Tools & Equipments (Pans, Knives and others) Total Req. Qty 1 1 1 1 30 1 2 1 2 30 2 1 Unit Cost (Rs.) Total Cost (Rs.) 125,000 250,000 200,000 350,000 75 50,000 15,000 1,500 10,000 200 20,000 50,000 125,000 250,000 200,000 350,000 2,250 50,000 30,000 1,500 20,000 6,000 40,000 50,000 1,124,750

The required machinery is easily available in the local markets. Used and new machinery can be purchased from different markets in Lahore and
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Pre-feasibility Study

Bakery and Confectionery

Gujranwala.These requirements are based on the proposed production plans as mentioned elsewhere. 10.6 Furniture&Fixtures and Other Equipments

In addition to the above plant machinery and equipment, following necessary items will be required for the proposed venture. Table 6: Furniture & Fixture and Other Equipment
Sr. No 1 2 Description of Item Production Tables Chairs & Other Furniture Cost of Renovation and Interior Designing Air conditioner Vertical Freezer Weighing Scales (For Cash Counter & Production) Micro Wave Oven Sign Board Miscellaneous Total 1 1 1 1 1 1 Req. Qty 2 Unit Cost (Rs.) Total Cost (Rs.) 5,000 10,000 10,000 10,000

3 4 5 6 7 8 9

125,000 45,000 30,000 5,000 10,000 10,000 25,000

125,000 45,000 30,000 5,000 10,000 10,000 25,000 270,000

10.7 Raw Material Requirements There is variety of raw materials required for production of different varieties of bakery and confectionary products. The complete details of raw materials along with recipe of different products are enclosed as Annexure 12.1.

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Pre-feasibility Study

Bakery and Confectionery

10.8 Human Resource Requirement Table 7: Human Resource Requirement Description Owner Manager Master Chef Salesmen Helpers Total Staff No. of Employees 1 1 2 2 6 Salary/Month (per person) 25,000 20,000 10,000 10,000

The owner of the business is recommended to personally manage the operations of the proposed venture. Additionally, above HR composition shall be engaged in order to manage the operational affairs of this project under the supervision of the owner. Appropriate experience for chef and salesmen would be required. 10.9 Revenue Generation Following table provides the details of sales revenues for year one: Table 8: Sales Revenue (1st Year) Product Mix Bakery Sales General Item Sales Total Sales % age of Sales 70% 30% 1st Year Sales Revenue (Rs.) 8,645,315 2,593,595 11,238,910

The above sales revenues are based on following key operational assumptions: Table 9: Operational Assumptions No of Working Days No. of Working Hours/day No. of Shifts/day 355 16 2

10.10 Utilities and Other Costs An essential cost to be borne by the company is the cost of electricity and gas. The electricity expenses are estimated to be around Rs. 50,000 per month,

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Pre-feasibility Study

Bakery and Confectionery

whereas, gas expenses are estimated to be Rs. 45,000 (including both natural gas and LPG). Considering the non availability or low pressure of natural gas alternate burning fuels i.e. LPG, wood or kerosene oil may need to be considered. Advance procurement of raw materials and packing material for at least 03 days along with 02 days finished goods stock level will be maintained for uninterrupted sales of goods, at the production and outlet facility.

11 CONTACT DETAILS OF EXPERTS & CONSULTANTS

Prof. Dr. Salim Ur Rehman National Institute of Food Science and Technology University of Agriculture, Faisalabad Phone:041-9200161-70/3011 Fax: 041-9201439 Mobile: 0300-6681047

Principal Scientific Officer Food and Biotechnology Research Centre PCSIR Labs Ferozpur Road, Lahore Ph: 042-99230688-95

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Pre-feasibility Study

Bakery and Confectionery

12 ANNEXURES
12.1 Income Statement
Income Statement
Year 1 11,238,910 Year 2 13,419,982 Year 3 15,747,024 Year 4 18,405,275 Year 5 21,437,705 Year 6 24,892,570 Year 7 27,401,857 Year 8 30,142,043 Year 9 33,156,247 Year 10 36,471,872

Revenue Cost of sales Cost of goods sold 1 Operation costs 1 (direct labor) Operating costs 3 (direct electricity) Operating costs 4 (direct water) Operating costs 5 (direct gas) Total cost of sales Gross Profit General administration & selling expenses Administration expense Administration benefits expense Building rental expense Electricity expense Outlet Travelling expense Communications expense (phone, fax, mail, internet, etc.) Office expenses (stationary, entertainment, janitorial services, Promotional expense Depreciation expense Amortization of pre-operating costs Miscellaneous expense 1 Subtotal Operating Income Earnings Before Interest & Taxes Interest expense on long term debt (Project Loan) Interest expense on long term debt (Working Capital Loan) Subtotal Earnings Before Tax Tax NET PROFIT/(LOSS) AFTER TAX

68% 2% 2%

76%

7,681,843 236,667 240,000 20,708 345,139 8,524,357 2,714,552

9,172,615 263,123 264,000 24,727 412,118 10,136,583 3,283,398

10,763,159 288,758 290,400 29,015 483,580 11,854,911 3,892,113

12,580,085 316,888 319,440 33,913 565,213 13,815,538 4,589,737

14,652,764 347,756 351,384 39,500 658,337 16,049,741 5,387,964

17,014,179 381,630 386,522 45,866 764,433 18,592,630 6,299,940

18,729,288 419,092 425,175 50,489 841,491 20,465,535 6,936,322

20,602,216 459,895 467,692 55,538 925,641 22,510,983 7,631,060

22,662,438 504,671 514,461 61,092 1,018,205 24,760,868 8,395,379

24,928,682 553,807 565,907 67,202 1,120,025 27,235,623 9,236,249

7% 1% 8% 3% 1% 0.14% 0.07% 1% 1% 0.11%

780,000 78,000 900,000 360,000 56,195 15,600 7,800 112,389 143,975 12,000 2,465,959 248,594 248,594 152,495 152,495 96,099 96,099

855,942 85,594 990,000 396,000 67,100 17,119 8,559 134,200 143,975 12,000 2,710,489 572,909 572,909 139,611 139,611 433,299 3,330 429,969

939,278 93,928 1,089,000 435,600 78,735 18,786 9,393 157,470 143,975 12,000 2,978,164 913,949 913,949 122,676 122,676 791,272 41,191 750,082

1,030,727 103,073 1,197,900 479,160 92,026 20,615 10,307 184,053 143,975 12,000 3,273,836 1,315,901 1,315,901 104,337 104,337 1,211,564 104,235 1,107,330

1,131,080 113,108 1,317,690 527,076 107,189 22,622 11,311 214,377 143,975 12,000 3,600,427 1,787,537 1,787,537 84,475 84,475 1,703,063 188,112 1,514,950

1,241,204 124,120 1,449,459 579,784 124,463 24,824 12,412 248,926 143,975 12,000 3,961,166 2,338,774 2,338,774 62,964 62,964 2,275,809 302,662 1,973,148

1,362,049 136,205 1,594,405 637,762 137,009 27,241 13,620 274,019 143,975 12,000 4,338,285 2,598,037 2,598,037 39,668 39,668 2,558,368 362,092 2,196,277

1,494,660 149,466 1,753,845 701,538 150,710 29,893 14,947 301,420 143,975 12,000 4,752,455 2,878,605 2,878,605 14,439 14,439 2,864,166 438,541 2,425,625

1,640,182 164,018 1,929,230 771,692 165,781 32,804 16,402 331,562 143,975 12,000 5,207,646 3,187,733 3,187,733 3,187,733 519,433 2,668,300

1,799,873 179,987 2,122,153 848,861 182,359 35,997 17,999 364,719 143,975 12,000 5,707,923 3,528,326 3,528,326 3,528,326 604,581 2,923,744

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Pre-feasibility Study

Bakery and Confectionery

12.2 Statement of Cash Flow


Cash Flow Statement
Year 0 Operating activities Net profit Add: depreciation expense amortization of pre-operating costs Deferred income tax Finished goods inventory Equipment inventory Raw material inventory Pre-paid building rent Accounts payable Cash provided by operations Financing activities Project Loan - principal repayment Additions to Project Loan Issuance of shares Cash provided by / (used for) financing activities Investing activities Capital expenditure Acquisitions Cash (used for) / provided by investing activities NET CASH Year 1 96,099 143,975 12,000 (120,061) (33,445) (22,500) 321,451 397,519 Year 2 429,969 143,975 12,000 3,330 (20,855) (40,744) (24,750) 62,939 565,864 Year 3 750,082 143,975 12,000 41,191 (23,878) (51,676) (27,225) 67,488 911,957 Year 4 1,107,330 143,975 12,000 104,235 (27,245) (65,403) (29,948) 77,356 1,322,300 Year 5 1,514,950 143,975 12,000 188,112 (31,046) (82,617) (32,942) 88,574 1,801,007 Year 6 1,973,148 143,975 12,000 302,662 (35,335) (80,258) (36,236) 100,343 2,380,298 Year 7 2,196,277 143,975 12,000 362,092 (25,824) (96,775) (39,860) 74,461 2,626,345 Year 8 2,425,625 143,975 12,000 438,541 (28,409) (117,098) (43,846) 81,782 2,912,570 Year 9 2,668,300 143,975 12,000 519,433 (31,248) (141,689) (48,231) 90,489 3,213,030 Year 10 2,923,744 143,975 12,000 604,581 (34,372) 816,396 530,538 59,583 5,056,446

(106,692) (225,000) (331,692)

1,837,298 204,144 2,041,442

(204,028) (204,028)

(220,962) (220,962)

(239,302) (239,302)

(259,164) (259,164)

(280,674) (280,674)

(303,970) (303,970)

(329,199) (329,199)

(1,559,750) (1,559,750) 150,000

397,519

361,836

690,995

1,082,998

1,541,843

2,099,624

2,322,376

2,583,370

3,213,030

5,056,446

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12.3 Balance Sheet


Balance Sheet
Year 0 Assets Current assets Cash & Bank Finished goods inventory Raw material inventory Pre-paid building rent Total Current Assets Fixed assets Machinery & equipment Furniture, fixtures and Office Equipment Office vehicles Total Fixed Assets Intangible assets Pre-operation costs Total Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Equity Current liabilities Accounts payable Total Current Liabilities Other liabilities Deferred tax Long term debt (Project Loan) Total Long Term Liabilities Shareholders' equity Paid-up capital Retained earnings Total Equity TOTAL CAPITAL AND LIABILITIES 150,000 106,692 225,000 481,692 547,519 120,061 140,137 247,500 1,055,217 909,355 140,916 180,881 272,250 1,503,402 1,600,350 164,795 232,557 299,475 2,297,176 2,683,348 192,039 297,960 329,423 3,502,770 4,225,191 223,085 380,576 362,365 5,191,218 6,324,815 258,420 460,834 398,601 7,442,671 8,647,191 284,244 557,610 438,461 9,927,505 11,230,561 312,653 674,708 482,307 12,700,229 14,443,591 343,901 816,396 530,538 16,134,426 19,500,037 378,273 19,878,310 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

1,124,750 270,000 45,000 1,439,750

1,012,275 243,000 40,500 1,295,775

899,800 216,000 36,000 1,151,800

787,325 189,000 31,500 1,007,825

674,850 162,000 27,000 863,850

562,375 135,000 22,500 719,875

449,900 108,000 18,000 575,900

337,425 81,000 13,500 431,925

224,950 54,000 9,000 287,950

112,475 27,000 4,500 143,975

120,000 120,000 2,041,442

108,000 108,000 2,458,992

96,000 96,000 2,751,202

84,000 84,000 3,389,001

72,000 72,000 4,438,620

60,000 60,000 5,971,093

48,000 48,000 8,066,571

36,000 36,000 10,395,430

24,000 24,000 13,012,179

12,000 12,000 16,290,401

19,878,310

321,451 321,451

384,390 384,390

451,879 451,879

529,235 529,235

617,809 617,809

718,151 718,151

792,612 792,612

874,394 874,394

964,884 964,884

1,024,466 1,024,466

1,837,298 1,837,298

1,837,298 1,837,298

3,330 1,633,270 1,636,600

44,521 1,412,308 1,456,829

148,755 1,173,007 1,321,762

336,867 913,843 1,250,710

639,529 633,169 1,272,698

1,001,621 329,199 1,330,820

1,440,162 1,440,162

1,959,595 1,959,595

2,564,176 2,564,176

204,144 204,144 2,041,442

204,144 96,099 300,243 2,458,992

204,144 526,068 730,212 2,751,202

204,144 1,276,149 1,480,294 3,389,001

204,144 2,383,479 2,587,624 4,438,620

204,144 3,898,430 4,102,574 5,971,093

204,144 5,871,577 6,075,721 8,066,571

204,144 8,067,854 8,271,998 10,395,430

204,144 10,493,478 10,697,623 13,012,179

204,144 13,161,778 13,365,923 16,290,401

204,144 16,085,523 16,289,667 19,878,310

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Bakery

12.4 Useful Project Management Tips Technology Required spare parts & consumables:Suppliers credit agreements and availability as per schedule of maintenance be ensured before start of operations. Energy Requirement: Should not be overlooked and alternate source of energy for critical operations be arranged in advance. Machinery Suppliers: Should be asked for training and after sales services under the contract with the machinery suppliers. Quality Assurance Equipment & Standards:Required products quality standards need to be defined on the packaging and a system to check them instituted, this improves credibility.

Marketing Product Development & Packaging:Expert's help may be engaged for product/service and packaging design & development. Ads & Point of Sales Promotion: Business promotion and dissemination through banners and launch events is highly recommended. Product brochuresshould be acquired from good quality service providers. Price - Bulk Discounts, Cost plus Introductory Discounts:Price should not be allowed to compromise on quality. Price during introductory phase may be lower and used as promotional tool. Product cost estimates should be carefully documented before price setting. Government controlled prices shall be displayed.

Human Resources Adequacy & Competencies: Skilled and experienced master chef should be considered an investment and be retained on better terms, if necessary

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Pre-feasibility Study

Bakery

12.5 Useful Links Prime Ministers Office, www.pmo.gov.pk Small and Medium Enterprise Development Authority, www.smeda.org.pk National Bank of Pakistan (NBP), www.nbp.com.pk First Women Bank Limited (FWBL), www.fwbl.com.pk State Bank of Pakistan (SBP), www.sbp.org.pk Government of Pakistan, www.pakistan.gov.pk Ministry of Industries & Production, www.moip.gov.pk Ministry of Education, Training & Standards in Higher Education, http://moptt.gov.pk Government of Punjab, www.punjab.gov.pk Government of Sindh, www.sindh.gov.pk Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk Government of Balochistan, www.balochistan.gov.pk Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk Government of Azad Jamu Kashmir, www.ajk.gov.pk Securities & Exchange www.secp.gov.pk Commission of Pakistan (SECP),

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Pre-feasibility Study

Bakery and Confectionery

13 KEY ASSUMPTION
13.1 Raw Material Assumptions
Plain & Dry Cakes Plain cakes Units of measure Kg Kg Kg Kg Pcs Ltr. Kg % ingredients 21.73% 3.86% 28.97% 0.97% 34.77% 0.05% 9.66% 100.0% 8,302 Qty Ingredients 303 333 393 12 7,261 1 Qty Ingredients in grams For Making 1 Kg 225 40 300 10 9 0.5 100 Qty Ingredients For Making 1 Kg (gms) 225 40 300 10 360 1 100 1036 Qty Ingredients For Making 1 Pound (gms) Qty Ingredients For Making 1 Pound (gms) 102.058 18.144 136.078 4.536 163.293 0.227 45.359

Raw material:

Quantity

Rate

Cost

Butter Sugar Maida Baking powder Eggs Flavor Cream and Honey Plain fruit cakes

280 50 373 12 11,594 1 124

450 60 50 60 7 500 400

125,959 2,986 18,661 746 81,157 311 49,762 279,582

Raw material:

Units of measure Kg Kg

Quantity

Rate

Cost

% ingredients 24.498% 3.920%

Qty Ingredients 162 178

Qty Ingredients in grams For Making 1 Kg 250 40

Qty Ingredients For Making 1 Kg (gms) 250 40

Butter Sugar

316 50

450 60

142,012 3,030

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Pre-feasibility Study

Bakery and Confectionery

Maida Baking powder Fruit Chunks Sougi Eggs Flavors

Kg Kg Kg Kg Pcs Ltr.

316 13 379 63 3,865 1

50 60 60 80 7 500

15,779 757 22,722 5,049 27,052 316 216,716

24.498% 0.980% 29.397% 4.900% 11.759% 0.049% 100.00%

211 6 66 66 3,888 0.32 4,578

250 10 300 50 3 0.5

250 10 300 50 120 0.5 1020.5

Dry cakes Units of measure Kg Kg Kg Kg Pcs Ltr. Kg % ingredients 22.167% 3.941% 27.094% 0.985% 35.468% 0.493% 9.852% 100.00% 18,023 Qty Ingredients 545 545 545 22 16,364 1.09 Qty Ingredients in grams For Making 1 Kg 225 40 275 10 9 5 100 Qty Ingredients For Making 1 Kg (gms) 225 40 275 10 360 5 100 1015 Qty Ingredients For Making 1 Pound (gms)

Raw material:

Quantity

Rate

Cost

Butter Sugar Maida Baking powder Eggs Flavor Cream + Honey Sweets & Nimko Nimko

357 63 436 16 14,492 8 159

450 60 50 60 7 500 400

160,629 3,807 21,814 952 101,446 3,966 63,458 356,072

Raw material:

Units of measure

Quantity

Rate

Cost

% ingredients

Qty Ingredients

Qty Ingredients in grams For Making 1 Kg

Qty Ingredients For Making 1 Kg (gms)

Qty Ingredients For Making 1 Pound (gms)

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Pre-feasibility Study

Bakery and Confectionery

Baison Dry Fruit Channey Nimko Masala Sweets

Kg Kg Kg Kg

485 139 69 17

90 160 120 150

43,639 22,166 8,312 2,598

68.293% 19.512% 9.756% 2.439%

491 123 61 25 25

700 200 100 25 25

700 200 100 25 25 Qty Ingredients For Making 1 Pound (gms)

Raw material:

Units of measure Kg Kg Kg Kg Kg

Quantity

Rate

Cost

% ingredients 33.816% 21.739% 15.459% 14.493% 14.493% 100%

Qty Ingredients 1,050 263 131 53 919 2,415

Qty Ingredients in grams For Making 1 Kg 350 225 4 150 150

Qty Ingredients For Making 1 Kg (gms) 350 225 160 150 150 1035

Khoya Maida Eggs Ghee Sugar syrup or Sugar Chicken Bread

1,801 1,158 21,300 772 772

400 50 7 175 800

720,290 57,880 149,100 135,054 617,391 1,679,716

Raw material:

Units of measure Kg Ltr Kg Kg Kg Kg

Quantity

Rate

Cost

% ingredients 14.648% 1.953% 0.195% 2.441% 0.195% 34.180%

Qty Ingredients 336.00 33.60 1.68 33.60 3.60 480.00

Qty Ingredients in grams For Making 1 Kg 150 20 2 25 2 350

Qty Ingredients For Making 1 Kg (gms) 150 20 2 25 2 350

Qty Ingredients For Making 1 Pound (gms)

Maida Oil Yeast Sugar Salt Chicken

416.02 55.47 5.55 69.34 5.55 970.70

50 190 180 60 8 275

20,801 10,539 998 4,160 44 266,943

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Pre-feasibility Study

Bakery and Confectionery

Onion Masala Cheese Mayonnaise & Ketchup Mix Vegetable Fresh Cream cakes

Kg Kg Kg Kg Kg

346.68 138.67 277.34 138.67 416.02 2,840

40 84 800 90 80

13,867 11,648 221,875 12,480 33,281 596,639

12.207% 4.883% 9.766% 4.883% 14.648% 100.000%

720.00 84.00 180.00 120.00 120.00 2,112

125 50 100 50 150 1024

125 50 100 50 150 1024 Qty Ingredients For Making 1 Pound (gms)

Raw material:

Units of measure Kg Kg Kg Kg Pcs Ltr. Kg

Quantity

Rate

Cost

% ingredients 12.207% 9.766% 12.207% 0.195% 15.625% 0.195% 49.805% 100.000%

Qty Ingredients 545 545 545 22 16,364 1.09 18,023

Qty Ingredients in grams For Making 1 Kg 80 100 100 2 4 2 510

Qty Ingredients For Making 1 Kg (gms) 125 100 125 2 160 2 510 1024

Butter Sugar Maida Baking powder Eggs Flavor Fresh Cream

491 393 491 8 16,103 8 2,005

450 60 50 60 7 500 300

221,135 23,588 24,571 472 112,718 3,931 601,486 987,899 1,185,479

* Assume 20% extra cost for this type of Cakes Pastries & Puff etc Units of measure Kg

Raw material:

Quantity

Rate

Cost

% ingredients 12.207%

Qty Ingredients 545

Qty Ingredients in grams For Making 1 Kg 100

Qty Ingredients For Making 1 Kg (gms) 125

Qty Ingredients For Making 1 Pound (gms)

Butter

315

450

141,526

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Pre-feasibility Study

Bakery and Confectionery

Sugar Maida Baking powder Eggs Flavor Fresh Cream

Kg Kg Kg Pcs Ltr. Kg

252 315 5 10,306 5 1,283

60 50 60 7 500 300

15,096 15,725 302 72,139 2,516 384,951 632,256

9.766% 12.207% 0.195% 15.625% 0.195% 49.805% 100.000% 100.000%

545 545 22 16,364 1.09 18,023 407

100 100 2 4 2 510

100 125 2 160 2 510 1024 1030 Qty Ingredients For Making 1 Pound (gms)

Bread Biscuits etc Units of measure Kg Kg Kg Kg Pcs Ltr.

Raw material:

Quantity

Rate

Cost

% ingredients 16.393% 14.465% 33.751% 0.482% 34.716% 0.193% 100%

Qty Ingredients 303 333 393 12 7,261 1 8,302

Qty Ingredients in grams For Making 1 Kg 170 150 350 5 9 2

Qty Ingredients For Making 1 Kg (gms) 170 150 350 5 360 2 1037

Butter Sugar Maida Baking powder Eggs Flavor

873 770 1,797 26 47,925 10

450 60 50 60 7 500

392,828 46,215 89,863 1,541 335,475 5,135 871,056

Snacks
Per Piece

Chicken Drum stick Leg Piece 45.5 Chicken Leg Piece 161,525

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Pre-feasibility Study

Bakery and Confectionery

63 Chicken Shami 21 Chicken Sandwich 35 Chicken Patties 17.5 Chicken Bread roll 21 Chicken Pizza Raw material: Maida Oil Yeast Sugar Salt Chicken Onion Masala Cheese Mayonnaise & Ketchup Mix Vegetables Units of measure Kg Ltr Kg Kg Kg Kg Kg Kg Kg Kg Kg Quantity 930.58 69.79 4.65 93.06 18.61 1,395.87 930.58 186.12 465.29 232.65 465.29 4,793 Rate 50 190 180 60 15 275 40 84 800 90 80

268,380 111,825 62,125 155,313 74,550 Qty Ingredients in grams For Making 1 Kg 200 15 1 20 4 300 200 40 100 50 100

Cost 46,529 13,261 838 5,583 279 383,865 37,223 15,634 372,233 20,938 37,223 933,607

% ingredients 19.417% 1.456% 0.097% 1.942% 0.388% 29.126% 19.417% 3.883% 9.709% 4.854% 9.709% 100%

Qty Ingredients 336.00 33.60 1.68 33.60 3.60 480.00 720.00 84.00 180.00 120.00 120.00 2,112

Qty Ingredients For Making 1 Kg (gms) 200 15 1 20 4 300 200 40 100 50 100 1030

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Pre-feasibility Study

Bakery

13.2 Sales Assumptions


Description Fresh Cream Cakes Fresh cream Fresh fruit Chocolate Cakes Butter cream cakes Total Fresh & Chocolate Pastries Donuts Cream puff Cream roll Total Bread (Out Sourced) Bread, Bun, Rusk Etc. Total Dry cakes Dry cakes Fruit cakes large Fruit cakes small Plain cakes large Plain cakes small Total Snacks Chicken pizza large Chicken pizza medium Chicken pizza small Chicken bread Chicken drum stick leg piece Chicken leg piece Chicken shami Chicken sandwich Chicken patties Chicken bread roll Total Units Pounds Pounds Pounds Pounds Sales per Day (Qty) 10 5 5 5 Sales Per Year (Qty) 3,550 1,775 1,775 1,775 8,875 1,775 1,775 1,065 1,065 5,680 Sales Price / Unit (Rs.) 180 180 180 180 Annual Sales (Rs.) 639,000 319,500 319,500 319,500 1,597,500 319,500 319,500 191,700 191,700 1,022,400

Pounds Pounds Pounds Pounds

5 5 3 3

180 180 180 180

Kgs

10

3,550

110

390,500 390,500

Pounds Pounds Pounds Pounds Pounds

10 3 5 3 5

3,550 1,065 1,775 1,065 1,775 9,230

180 140 140 120 120

639,000 149,100 248,500 127,800 213,000 1,377,400

Pcs Pcs Pcs Pcs Pcs Pcs Pcs Pcs Pcs Pcs

5 10 14 8 10 12 15 5 25 10

1,775 3,550 4,970 2,840 3,550 4,260 5,325 1,775 8,875 3,550 40,470

380 200 100 380 65 90 30 50 25 30

674,500 710,000 497,000 1,079,200 230,750 383,400 159,750 88,750 221,875 106,500 4,151,725

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Pre-feasibility Study

Bakery

Description Sweets & Nimko Nimko Gulab Jaman Chum Chum Kalakand Burfi Moti Choor Pateesa Total Biscuits Cake Rusk White Biscuits Coconut Biscuits Macaroon Coconut Almond Macaroon Cheese Finger Salty Zeera Plus Plain Khatai Baker Khani Finger Jam Wafer Special Biscuit Chocolate Biscuits Round Almond Biscuit Total

Units Kgs Kgs Kgs Kgs Kgs Kgs Kgs

Sales per Day (Qty) 2 3 3 2 3 3 1 15

Sales Per Year (Qty) 710 1,065 1,065 710 1,065 1,065 355 5,325

Sales Price / Unit (Rs.) 400 375 375 375 375 375 375

Annual Sales (Rs.) 284,000 399,375 399,375 266,250 399,375 399,375 133,125 2,280,875

Kgs Kgs Kgs Kgs Kgs Kgs Kgs Kgs Kgs Kgs Kgs Kgs Kgs Kgs

2 1 1 1 1 1 1 1 1 1 1 1 1 1 15

710 355 355 355 355 355 355 355 355 355 355 355 355 355 5,325

320 320 320 320 320 320 320 320 320 320 320 320 320 320

227,200 113,600 113,600 113,600 113,600 113,600 113,600 113,600 113,600 113,600 113,600 113,600 113,600 113,600 1,704,000

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